Eloquent words and "spin" work better in a campaign than they do while governing. And as Mr. Obama is discovering, the laws of economics won't change, even for him.OK, here's me, Feb. 15, at AmSpecBlog:
The fiscal fantasies of Hope are about to slam head-on into the economic realities of the bond market. Economic reality is an unmovable object, and liberals are about to discover that Hope is not an irresistible force.No specialized knowledge or advanced education is needed to understand why Obamanomics won't work. All you need is two eyes, a brain, and the common sense of common people. Ignore the polls. Ordinary Americans who are watching their hard-earned retirement savings evaporate in the stock-market meltdown caused by Obamanomics are beginning to realize that Hope is a poor substitute for basic economics. As bad as the stock-market slide has been, try to imagine the crisis that could ensue if the bond market gets the jitters. Associated Press on Wednesday reported:
Or, in fewer words: It Won't Work.
Analysts are anticipating that the Treasury Department on Thursday will announce plans [to] auction $60 billion in notes next week. The government has been issuing debt this year at a record pace to finance its bailouts.No sign yet of a doomsday scenario, but these massive deficit-spending schemes piled one atop each other are placing unprecedented pressure on capital markets already ratcheted drum-tight by the bursting of the housing bubble and related financial fallout. Obama's budget is a fantasy, and while bonds tend to go up when stocks go down (people shifting capital from risk to security), we're now on such shaky ground -- fiscal, financial and monetary policy all going where no policies have gone before -- that the future is beyond prediction, certainly for a mere amateur like me. People are scared. People are angry. They're "going Galt." They're planning a National Tea Party April 15. Good-bye, Hope and Change. Hello, Fear and Loathing. When the going gets weird, the weird turn pro. (Cross-posted at AmSpecBlog.)
So far, auctions have been met with solid demand. But investors have gotten warier about buying Treasurys, particularly long-term ones.